Federalism is a two way street. If the Federalism mean that the States have some autonomy and freedom, they also have to take the fiscal responsibility for it.
Union cant bankroll the States.
This #ChineseVirus is a force majeure. The Union cannot compensate the States for the revenue deficit, that is caused by this black swan event.
Some are saying that after GST, the States have no powers to increase taxes.
Do you know that tax on agriculture income is exclusively on the States' List. WIll any state dare to impose tax on agriculture income?
Raising tax rates and cesses is laziest option Govts have and good that reforms like GST put a stop to it (wish something similar for Direct Taxes)
Only fiscal options shud be:
-Expand the tax base, stop tax chori
-Cut wasteful expenditure
-Prioritise spend for max bang for buck
And if course, borrow money to create productive assets and Infrastructure. (but not for Opex, like karz le kar ghee piyo!)
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